ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. — AGM Information 2006

Oct 25, 2006

ENVIRONMENTAL SOLUTIONS INTERNATIONAL LIMITED ABN 28 009 120 405

NOTICE OF ANNUAL GENERAL MEETING

TIME: 11.00 am (EST)

DATE: 30 November 2006

PLACE: The Institute of Chartered Accountants Level 3 600 Bourke Street Melbourne, Victoria

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on (08) 9486 2333.

CONTENTS PAGE

Notice of Annual General Meeting (setting out the proposed resolutions)	З
Explanatory Statement (explaining the proposed resolutions)	Ô
Glossary	8
Annexure A	9
Proxy Form

TIME AND PLACE OF MEETING AND HOW TO VOTE

VENUE

The Annual General Meeting of the Shareholders of Environmental Solutions International Limited to which this Notice of Meeting relates will be held at 11.00am (EST) on 30 November 2006 at:

The Institute of Chartered Accountants $level 3$ 600 Bourke Street Melbourne, Victoria

YOUR VOTE IS IMPORTANT

The business of the Annual General Meeting affects your shareholding and your vote is important.

VOTING IN PERSON

To vote in person, attend the Annual General Meeting on the date and at the place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the proxy form enclosed and send the proxy form:

• by post to Environmental Solutions International Limited, PO Box 535, Applecross, $(\alpha)$ Western Australia 6953; or
• $(b)$ by facsimile to the Company on facsimile number (08) 9355 4580,

so that it is received not later than 11,00am (EST) on 28 November 2006.

Proxy forms received later than this time will be invalid.

NOTICE OF ANNUAL GENERAL MEETING

Notice is given that the Annual General Meeting of Shareholders of Environmental Solutions International Limited will be held at The Institute of Chartered Accountants, Level 3, 600 Bourke Street, Melbourne, Victoria, at 11am (EST) on 30 November 2006.

The Explanatory Statement to this Notice of Meeting provides additional information on matters to be considered at the Annual General Meeting. The Explanatory Statement and the proxy form are part of this Notice of Meeting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the General Meeting are those who are registered Shareholders of the Company at the close of business on 28 November 2006.

Terms and abbreviations used in this Notice of Meeting and Explanatory Statement are defined in the Glossary.

Reports and Accounts

To receive and consider the financial statements of the Company for the year ended 30 June 2006 together with the declaration of the Directors, the Directors' report, the remuneration report and the auditor's report.

SPECIAL BUSINESS

$\mathbf{1}$ . RESOLUTION 1 - CHANGE OF NAME

To consider and, if thought fit, to pass, with or without amendment, the following resolution as a special resolution:

"That, for the purposes of Section 157(1) of the Corporations Act, and for all other purposes, the name of the Company be changed to Environmental Clean Technologies Limited."

$\overline{2}$ RESOLUTION 2 - APPOINTMENT OF NEW AUDITOR

To consider and, if thought fit, to pass, with or without amendment, the following resolution as a special resolution:

"That, PKF Chartered Accountants who have consented in writing to act as auditor of the Company, be appointed auditor of the Company and that the Directors be authorised to agree their remuneration"

ORDINARY BUSINESS

$\mathbf{3}$ . RESOLUTION 3 - RE-ELECTION OF DIRECTOR - MR JOHN MCMULLAN

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

"That Mr John McMullan, having been appointed as a director of the Company on 22 June 2006 and being eligible for re-election, be reelected as a director of the Company."

$\overline{4}$ . RESOLUTION 4 - RE-ELECTION OF DIRECTOR - MR ANTHONY GATES

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

"That Mr Anthony Gates, having been appointed as a director of the Company on 26 October 2006 and being eligible for re-election, be re-elected as a director of the Company."

$\overline{5}$ . RESOLUTION 5 - RE-ELECTION OF DIRECTOR - MR SACHLAN FRAVAL

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

"That, for all purposes, Mr Sachlan Fraval, a Director of the Company who retires by rotation in accordance with clause 13.2 of the Constitution and, being eligible, is re-elected as a Director of the Company."

$\boldsymbol{6}$ . RESOLUTION 6 - RATIFICATION OF SHARE PLACEMENT

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

"That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the allotment and issue by the Company of 555,555 Shares at an issue price of \$0.45 each on the terms and conditions set out in the Explanatory Memorandum."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by any persons who participated in the issue and any associates of those persons.

$\overline{z}$ RESOLUTION 7 - ADOPTION OF THE REMUNERATION REPORT

To consider and, if thought fit, to pass, with or without amendment, the following resolution as a non-binding resolution:

"That, for the purposes of Section 250R(2) of the Corporations Act, the Company adopt the Remuneration Report for the year ended 30 June 2006."

Short Explanation: The vote on this Resolution is advisory only and does not bind the Directors or the Company.

DATED: 19 OCTOBER 2006

BY ORDER OF THE BOARD

ENVIRONMENTAL SOLUTIONS INTERNATIONAL LIMITED SEAN HENBURY COMPANY SECRETARY

Voting Exclusion Note:

Where a voting exclusion applies, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the proxy form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of the Shareholders of the Company in connection with the business to be conducted at the Annual General Meeting to be held at The Institute of Chartered Accountants, Level 3, 600 Bourke Street, Melbourne, Victoria on 30 November 2006 at 11.00am (EST).

This purpose of this Explanatory Statement is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions in the Notice of Meeting.

$\overline{1}$ REPORTS AND ACCOUNTS

In accordance with the Company's Constitution, the business of the meeting will include receipt and consideration of the financial statements of the Company for the year ended 30 June 2006 together with the declaration of the Directors, the Directors' report, the remuneration report and the auditor's report.

$\overline{2}$ . RESOLUTION 1 - CHANGE OF NAME

The new name proposed to be adopted under Resolution 1 is Environmental Clean Technologies Limited. The Directors believe that this new name more accurately reflects the proposed future operations of the Company.

$\overline{3}$ . RESOLUTION 2 - APPOINTMENT OF NEW AUDITOR

The Company has received a notice of resignation from Deloitte Touche Tohmatsu as the auditor of the Company. Under Section 329(5) of the Corporations Act, the ASIC has aiven its consent to the resianation. The resianation of Deloitte Touche Tohmatsu as the auditor will take effect upon the close of the Meeting convened by this Notice.

Resolution 2 is a special resolution seeking the appointment of PKF Chartered Accountants as the new auditor of the Company.

As required by the Corporations Act, a nomination for PKF Chartered Accountants to be appointed as the auditor of the Company has been received from a member (a copy of which is provided as Annexure A to this Notice).

PKF Chartered Accountants has consented to act as auditor of the Company.

$\overline{\mathbf{4}}$ . RESOLUTIONS 3 AND 4 - RE-ELECTION OF DIRECTORS - MR JOHN MCMULLAN AND MR ANTHONY GATES

Mr John McMullan and Mr Anthony Gates were appointed as additional Directors on 22 June 2006 and 26 October 2006 respectively.

Clause 13.4 of the Constitution provides that the Directors may at any time appoint a person to be a Director, either to fill a casual vacancy or as an addition to the Any Director so appointed holds office only until the next existing Directors. following general meeting and is then eligible for re-election.

Both Mr John McMullan and Mr Anthony Gates retire and being eligible seek reelection.

$\overline{5}$ . RESOLUTION 5 - RE-ELECTION OF DIRECTOR - MR SACHLAN FRAVAL

Clause 13.2 of the Constitution requires that if the Company has three or more Directors, one third of those Directors (or the number nearest one third) must retire at each annual general meeting.

The Company currently has four Directors and accordingly one must retire. A Director who retires under clause 13.2 is eligible for re-election.

Mr Sachlan Fraval will retire by rotation and seeks re-election.

$\mathbf{6}$ RESOLUTION 6 - RATIFICATION OF SHARE PLACEMENT

On 5 September 2006, the Company announced the placement of 555,555 Shares at \$0.45 each. The allottees pursuant to this placement are related parties of the Company, Romfal Sifat Pty Ltd is a company controlled by Mr Faldi Ismail a former director of the Company, and Mr Zaakir Ismail is a brother of Mr Faldi Ismail.

Resolution 6 seeks Shareholder approval to ratify the issue of these Shares in accordance with ASX Listing Rule 7.4. By ratifying this issue, the Company will retain the flexibility to issue equity securities in the future up to the 15% threshold set out in ASX Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

Pursuant to and in accordance with Listing Rule 7.5, the following information is provided:

555,555 Shares were allotted and issued to the parties set out below: $(a)$

Allottee	No. of Shares
Mr Zaakir Ismail As trustee for the Ismail Investment Trust	555
Romfal Sifat Pty Ltd As trustee for the Fizmail Family Trust	555,000

$(b)$ the Shares were allotted and issued on 15 September 2006;

$\left( \bigcirc \right)$ the issue price of each of the Shares was \$0.45 each;

• $(d)$ the Shares issued were all fully paid ordinary shares in the capital of the Company and will rank equally with the Company's other issued Shares; and
• $(e)$ the funds raised were used for working capital purposes.

$\overline{7}$ . RESOLUTION 7 - ADOPTION OF REMUNERATION REPORT

The Remuneration Report is set out in the Directors' Report in the Company's 2006 Annual Report. The Remuneration Report sets out the Company's remuneration arrangements for the Directors and senior management of the Company.

A reasonable opportunity will be provided for discussion of the Remuneration Report at the Meetina.

The Corporations Act requires that at a listed company's annual general meeting, a resolution that the remuneration report be adopted must be put to the shareholders. However, Shareholders should note that the vote on this Resolution is advisory only and does not bind the Directors or the Company.

GLOSSARY

Annual General Meeting or Meeting means the meeting convened by the Notice.

ASX Listing Rules or Listing Rules means the Listing Rules of the Australian Stock Exchange Limited.

Board means the board of directors of the Company.

Company means Environmental Solutions International Limited (ABN 28 009 120 405).

Constitution means the Company's constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the directors of the Company.

Explanatory Statement means the explanatory statement to the Notice.

Notice and Notice of Meeting means the notice of annual general meeting accompanying this Explanatory Statement.

Resolutions means the resolutions set out in the Notice, or any one of them, as the context requires.

Share means a share in the Company.

Shareholder means a shareholder in the Company.

ANNEXURE A

16 October 2006

The Company Secretary Environmental Solutions International Limited C/- FJH Solutions Pty Ltd 21 Teddington Road Ground Floor BURSWOOD WA 6100

Dear Sir

I, Faldi Ismail, in my capacity as member of Environmental Solutions International Limited, hereby nominate the following entity for the office of auditor of the company from the period following the closure of the annual general meeting of the company to be held on 30 November 2006:

PKF Chartered Accountants Level 11 CGU Tower 485 La Trobe Street Melbourne VIC 3000

Yours faithfully

Faldi Ismail

This page has been left blank intentionally.

PROXY FORM

APPOINTMENT OF PROXY ENVIRONMENTAL SOLUTIONS INTERNATIONAL LIMITED ABN 28 009 120 405

GENERAL MEETING

being a Member of Environmental Solutions International Limited entitled to attend and vote at the Meeting, hereby

Appoint

Name of proxy

OR

Mark this box if you wish to appoint the Chairman of the Meeting as your proxy

or failing the person so named or, if no person is named, the Chairman of the Meeting or the Chairman's nominee, to vote in accordance with the following directions or, if no directions have been given, as the proxy sees fit at the General Meeting to be held at 11:00am (EST), on 30 November 2006 at The Institute of Chartered Accountants, Level 3, 600 Bourke Street, Melbourne, Victoria and at any adjournment thereof. If no directions are given, the Chairman will vote in favour of all the resolutions.

Voting on Business of the General Meeting

Resolution 1 - Change of Name Resolution 2 - Appointment of New Auditor Resolution 3 - Re-election of Director - Mr John McMullan Resolution 4 - Re-election of Director - Mr Anthony Gates Resolution 5 - Re-election of Director - Mr Sachlan Fraval Resolution 6 – Ratification of Share Placement		FOR	AGAINST	ABSTAIN
	Resolution 7 - Adoption of Remuneration Report

OR

In relation to these Resolutions, if the Chairman is to be your proxy and you do not wish to direct your proxy how to vote on these Resolutions, please place a mark in this box $\Box$

By marking this box, you acknowledge that the Chairman of the meeting may exercise your proxy even if he has an interest in the outcome of the resolution and votes cast by him other than as proxy holder will be disregarded because of that inferest. If you do not mark this box, and you have not directed your proxy how to vote, the Chairman of the meeting will not cast your votes on these Resolutions and your votes will not be counted in computing the required majority if a poll is called on these Resolutions. The Chairman intends to vote in favour of these Resolutions.

IF THE CHAIRMAN IS TO BE YOUR PROXY IN RELATION TO RESOLUTIONS 1 TO 7 YOU MUST EITHER MARK THE BOXES DIRECTING YOUR PROXY HOW TO VOTE OR MARK THE BOX INDICATING THAT YOU DO NOT WISH TO DIRECT YOUR PROXY HOW TO VOTE, OTHERWISE THIS APPOINTMENT OF PROXY IN RELATION TO RESOLUTIONS 1 TO 7 WILL BE DISREGARDED.

If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item on a show of hands or on a poll and that your shares are not to be counted in computing the required majority on a poll.

If two proxies are being appointed, the proportion of voting rights this proxy represents is

Signed this

day of

2006

Bv:

Individuals and joint holders

Signature
Signature
Signature

Companies (affix common seal if appropriate)

Director

Director/Company Secretary

Sole Director and Sole Company Secretary

℅

ENVIRONMENTAL SOLUTIONS INTERNATIONAL LIMITED ABN 28 009 120 405

Instructions for Completing 'Appointment of Proxy' Form

• $\mathbb{1}$ . A member entitled to attend and vote at a Meetina is entitled to appoint not more than two proxies to attend and vote on their behalf. Where more than one proxy is appointed, such proxy must be allocated a proportion of the member's votina rights. If the shareholder appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes.
• $\overline{2}$ . A duly appointed proxy need not be a member of the Company. In the case of joint holders, all must sign.
• $\overline{3}$ . Corporate shareholders should comply with the execution requirements set out on the Proxy Form or otherwise with the provisions of Section 127 of the Corporations Act. Section 127 of the Corporations Act provides that a company may execute a document without using its common seal if the document is signed by:
• 2 directors of the company;
• a director and a company secretary of the company; or
• for a proprietary company that has a sole director who is also the sole company secretary - that director.

For the Company to rely on the assumptions set out in Section 129(5) and (6) of the Corporations Act, a document must appear to have been executed in accordance with Section 127(1) or (2). This effectively means that the status of the persons signing the document or witnessing the affixing of the seal must be set out and conform to the requirements of Section 127(1) or (2) as applicable. In. particular, a person who witnesses the affixing of a common seal and who is the sole director and sole company secretary of the company must state that next to his or her signature.

• $\overline{4}$ . Completion of a Proxy Form will not prevent individual shareholders from attending the Meeting in person if they wish. Where a shareholder completes and lodges a valid proxy form and attends the Meeting in person, then the proxy's authority to speak and vote for that shareholder is suspended while the shareholder is present at the Meeting.
• 1. Where a Proxy Form or form of appointment of corporate representative is lodged and is executed under power of attorney, the power of attorney must be lodged in like manner as this proxy.